Magellan’s merger with Barrenjoey to create a $1.6b Macquarie rival

AFR

Barrenjoey, founded by former UBS top deal makers Matthew Grounds and Guy Fowler, is positioning itself for a decade of growth after a transformational merger with its largest shareholder, Magellan Financial Group, which valued the five-year-old investment bank at $1.6 billion. Magellan, which held a 36.4 per cent stake in Barrenjoey, revealed the merger on Monday and said it would issue shares to the investment bank’s other shareholders. The deal was welcomed by analysts and investors, who said combining the two companies would create a “Macquarie-like growth story”.

“When Magellan set up 15 years ago, it was hugely innovative and successful,” Magellan chairman Andrew Formica said. “Barrenjoey has shown in the last five years how entrepreneurial it can be, and we believe this [merger] unleashes that in a way that accelerates growth.” The surprise merger came after Magellan delivered a full-year profit that revealed Barrenjoey’s net profit had doubled.

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